top of page
Search

Cheque Bounce Notice- Procedure, Punishment and Penalty

  • Writer: lead India
    lead India
  • Aug 29, 2023
  • 3 min read

In the financial world, cheque is an instrument used during the business transactions, it is termed as a negotiable instrument to transport money in the physical form or for inter-account transfer.


Cheque Bounce: is a term which is used to define the unsuccessful processing of a cheque, which could be due to various reasons. One of the primary reasons for the cheque bounce is Non-sufficient Funds (NFS). The banks return or dishonour the cheques apart from imposing a particular charge, these cheques are also known as Rubber Cheques.


Legal Notice for a cheque bounce-

A legal notice for cheque bounce is generally sent by the advocate on behalf of his/her client as a result of the non- payment of the cheque. Sending a legal notice implies that the beneficiary of the cheque would proceed with a legal action if the payment for the cheque is not done immediately.


To issue a legal notice for cheque bounce the following conditions should be there-

  • The should be issued towards a liability

  • The cheque should be returned due to insufficiency of balance

  • The payee of the cheque could make a demand for the payment of the amount due by sending a notice in writing withing 30 days of the receipt of the information by him/her from the banks that there are insufficient funds.

  • If the cheque drawer fails to provide satisfactory rely or payment of the said amount within 15 days of the receipt of legal notice for cheque bounce, legal action could be initiated within one month from the date when the legal notice was sent.

How to Send Cheque Bounce Notice?

A Cheque bounce notice could be drafted through the assistance of an experienced cheque bounce lawyer. After the drafting of the notice has been completed, it must be printed on a plain paper or on the letterhead of the lawyer, afterwards it shall be delivered to the cheque issuer. Cheque bounce notice has to contain the following-

  • Name of the beneficiary of the cheque

  • Name and address of the check issuer,

  • The date of cheque bounce,

  • Reasons for cheque bounce,

  • Requests which are made to check issuer for an alternate payment to be made immediately (within 15 days) and

  • That the notice has been issued under Section 138 of the Negotiable Instrument Act.

A cheque bounce notice must be sent through a registered post for the purpose of recording the issuing date of notice in a formal manner. Cheque beneficiary can keep one copy of the notice with himself while the other copy shall be delivered to the cheque issuer through the registered post.


Punishment and Penalty

In case the drawer pays the cheque amount within a period of 15 days from the date he or she received the notice, the drawer in cheque case would not have committed any offence. If the payment has not been made, the payee can proceed to file a complaint with the court of the jurisdictional magistrate within a period of one month from the date the 15 days prescribed in the notice has expired.


After having received the complaint, along with an affidavit and relevant paper trail, the court shall issue summons and hear the matter. When found guilty-

  • The defaulter could be punished with a monetary penalty which could be twice the amount written in the cheque or an imprisonment for a term which can be extended to a term extending up to two years or both.

  • The bank would also have the right to stop the cheque book facility and close the account for repeat offences of bounced cheques.

Lead India offers you a team of experienced advocates, who have been successfully dealing with cases including the cheque bounce case solution as well as initiating cheque bounce cases. Therefore, if you wish to talk to a lawyer or seek free legal advice online, you may contact us.


Call Us: +91–8800788535


 
 
 

Comments

Thelila059

info@mysite.com

©2023 by Thelila059. Proudly created with Wix.com

bottom of page